CCI Clears Some Pending Infrastructure Projects

Infrastructure has always been at the core of India’s growth story. However, infrastructure companies have been underperforming since the past two years. There are quite a few reasons behind this. Many projects got stuck on account of financial infeasibility; few got stuck on account of non-availability of credit and a few others on account of various hurdles in clearances. Most of the projects were delayed thanks to non-receipt of environmental clearances.

To provide a boost to infrastructure, the government had formed a Cabinet Committee on Investment (CCI) to fast track pending projects. After remaining dormant for some time, the CCI has come into action. Reports suggest that giving a major push to the infrastructure and energy sector, the government in the past two months has given a nod to projects worth Rs 74,000 crore which were caught in a logjam for years due to a lack of clearances. We feel that the CCI’s move is a very positive one and may provide the much needed impetus to infrastructure companies.

According to reports, a key beneficiary of this has been the petroleum sector, where investments worth USD 13.42 billion for exploration and production activities in 40 oil blocks were held up because of objections raised by the Defence Ministry over security concerns.

The CCI, at a meeting chaired by Prime Minister Manmohan Singh on March 20, approved the conditional clearance given to five blocks, where investments to the tune of Rs 52,921 crore have already been made. The CCI decision has paved the way for investments worth Rs 1,566 crore, an official statement said.

The processes of granting environment and forest clearances for mega projects have also been streamlined and made easier in cases such as renewal of mining leases. It has also been decided that no fresh Environment Clearance (EC) shall be required for any mining project at the time of renewal of its mining lease, if an EC has been obtained under the EIA Notification of 2006. Apart from this, for one time capacity expansion of 25 per cent or less, coal mining projects have now been exempted from public hearing provided that it had taken place at the time of obtaining the existing EC and the mining is confined to the existing lease area.

This notification is bound to impact infrastructure companies positively. Coal India will be a major beneficiary as it can now start its many delayed projects. Further, the power companies are also expected to benefit as many are still facing coal supply issues.